Best Buy Inventory Policy

Best Buy currently utilizes the ABC Inventory Management system. This system's purpose is to set priorities on effort used to manage different products. Of the ABC Management system, the major policy initiated is the P System or Periodic Review. Through an electronic catalog or database called RSS or Retek Store System. Best Buy tracks purchases and closely follows stock. The inventory is maintained on a weekly basis to see which items need to be replenished. If Best Buy sells 5 Samsung ln46a650 televisions this week, then the computer system will automatically place an order for 5 to be shipped on the next inbound shipment from their warehouse. This periodic review system allows for Best Buy to not have to spend extra time and money for checking inventory on a daily basis. Best buy establishes this weekly checking by calculating Q/d. In order for fast and efficient deliveries maintaining stock, they splice up their hundreds of stores into districts. Each district is based on geographic regions and each district is assigned a regional warehouse to order from. By setting up multiple warehouses, a store in NJ doesn't just have to wait for their deliveries from their head quarters home in Minnesota. Best Buy uses this system in conjunction with their sales promotions. If Best Buy sees a product not moving consistently off their shelves they will most likely set up a promotion to increase purchases, but they might first order extra units depending on their weekly counts.

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